Good morning, ladies and gentlemen, friends from the media, analysts, bankers, investors, and fellow CDL colleagues. My name is Belinda, and I am the Head of Investor Relations and Corporate Communications at CDL. On behalf of the CDL management, welcome to CDL's briefing on its unaudited financial results for half year ended 30th June 2026. This is a hybrid briefing format with both in-person here at the M Hotel, Singapore, and those joining us virtually on the live webcast. Thank you for being here. I know it is a very busy financial reporting season, and to see so many in this room brings us much joy. Thank you for all for being here. For today's briefing, in line with CDL's commitment to environmental sustainability, we will not be providing printed materials.
Instead, please scan the QR code on the screen to download several documents that were uploaded on SGXNet this morning. They include a copy of the detailed financial results statement, a press release summarizing some of the key highlights of our performance, a presentation deck that the management will be using in a very short while. For our guests that are joining us virtually, you would similarly be able to download these documents, which are available on the CDL website. I would like to introduce you to the CDL management panel. In the center, we have Mr. Kwek Leng Beng, our Executive Chairman, and followed by our ExCo members. On his right, Mr. Sherman Kwek, Group CEO. On his left, Mr. Kwek Eik Sheng, Group Chief Operating Officer.
Then followed by Mr. Chia Ngiang Hong, Group General Manager, and nearest to me, Ms. Yiong Yim Ming, Group Chief Financial Officer. The format today briefing is in two parts. We will kick off with a presentation of some of the key highlights of our performance, followed later by a Q&A session. Without further ado, I would like to invite Mr. Sherman Kwek, CDL Group CEO, to kick start the presentation. Mr. Kwek, please.
Hi. Good morning, everyone. Thank you, Belinda, for the introduction, and thank you for making time to come over. As Belinda has mentioned, I know it is a busy day for all of you with several earnings announcements coming out today as well. I am happy to take you through our performance highlights for the first half. Yiong Yim Ming will then take you through financial highlights, the ops review, for your perusal, and if you have any questions, let us know. Performance highlights, really happy to be here to share some strong results for our first half. You will see that our revenue is up slightly over 60%, and our PATMI is up more than three times or 230%. Primarily, this has been driven by our strong Singapore property development segment.
We have several projects that really did well for us, and we recognized revenue on. They were built at a faster pace, so revenue and profit recognition came in faster as well. Obviously, one is Lumina Grand, as we have mentioned up there. That is an EC in Bukit Batok West Avenue 5. That has been completed, and therefore, under the prevailing rules, we recognize full revenue and profit. Other contributors that were strong were Newport. Newport Residences was launched at the beginning of this year, and is now over 80% sold. Because that project, as you know, we delayed the launch because we were going to launch, right as we were going to launch the 60% ABSD on foreigners was announced. We held back on that, and as a result, the launch was delayed by quite a while.
Because of that, the building completion has gone on much faster. Therefore, we are also recognizing good revenue from there. Lastly, many of our other Singapore projects continue to have steady sales. Norwood Grand. We had a bit of a slow start with Union Square Residences, which is quite a pity because it is in such a beautiful, mixed-use development and in a really great fringe CBD location. But glad to see that sales have really started to pick up as well over the last couple of months. You will see that across the board, all of our core operating segments have shown strong operating results. As I mentioned earlier, Newport Residences was a great launch for us. Then we have had a very resilient performance with so-called the commercial portfolio comprising office and retail. We are still doing really well and trading above actually the market average.
The U.K. commercial has held steady, too. On the residential market in Singapore, I think this year, we continue to see a good, stable price growth. So far, I think year to date is about 1.4% according to the URA Private Residential Property Price Index. The volume has been about slightly over 4,000 units. Year to date, about 4,100. Are we going to hit the 10,008 that the market did last year? May not. Primarily it is because there has been less launches in the first half this year. Let us see how the back half stacks up. But I think we should get within a range of maybe 8,000- 10,000 by the time we end this year. But, yeah. It has been a really good start for us and actually underpinning our entire first half has been strong Singapore property development revenue and profit.
Noticeably absent from this, our capital recycling gains. We have certainly pushed hard for the first half this year. But, I think with a lot of different factors, such as, the Middle East conflict, which continues to be quite prolonged and rages on, as well as the fact that we have seen a lot of turbulence here and there. I mean, the U.K. went through their own political upheaval with the change of government, all that. So I think that has dampened a bit of investor optimism in the first half. But, I see that momentum coming back now, so our divestments will probably be more weighted on the second half. I am not sure whether they will complete in the second half or into next year. But certainly there are several in the pipeline, and we hope to be able to share more exciting news on that.
But as mentioned, at previous analyst and media briefings, capital recycling is going to be a core part of our DNA and our business as usual in future. We really got to get that ramped up, and that will really provide a stronger base for our results. Going into the next slide, we have our NAV and shareholder returns. You can see that predominantly, I think NAV and RNAV and RRNAV are pretty stable. This year we declared an interim dividend of SGD 0.06 , which is double what we declared for the half year of last year. Obviously we have made a commitment to the market that we will hit a minimum of 35% dividend payout. We're leaving it more for the full year.
And share price performance, this was as of year to date as of June 30, but obviously, we are all very pleased to see the rally today. Our segment analysis, if you look at the fair value, our assets have ticked up slightly from 35 billion to 36 billion. Business segments IP, DP, there are some changes, in terms of geography as well. But predominantly, I think that really fluctuates depending on how much DP we have at any one point in time. You will notice that this year we haven't made any significant investments. Neither, as I mentioned earlier, we have made any significant. We haven't made any significant divestments. In terms of investments, we have mainly made two, and those are the two GLS sites that we acquired in Singapore.
And one is Tanjong Rhu Road, and the other is Peck Hay, which is Scotts Road, the base of Cairnhill area. This is the completed project, Lumina Grand at Bukit Batok West Avenue 5, I mentioned. Norwood Grand, 92% sold and just TOP'ed earlier this month, about two weeks ago. Then our upcoming project completions for the rest of this year, we have CanningHill Piers, our JV with CapitaLand, as well as The Myst. Both are substantially sold. As mentioned earlier, the only investments we made this year were the two GLS sites in Singapore, and added together with the rest of our land bank, I think we have a healthy launch pipeline of 2,200. We're comfortable with this level, and that positions us well going forward. We obviously look forward to unveiling Lucerne Grand.
That's in Lakeside Drive out in Jurong West, and will have magnificent views. I really hope the project will be well-received. We're doing just a little bit of marketing here for the project. You can see it's five towers, 17 storeys each. We think we've designed it well, and it's directly connected to the Lakeside MRT station. That's always a very important amenity that buyers look at nowadays. Please spread the word. In October, when we launch this, hopefully this will garner a strong reception. This just shows you a little bit about our two projects that we are legacy assets that we are redeveloping, which all of you are very familiar with now. One is Newport Plaza, which is the name of the whole development, which was the former Fuji Xerox Towers.
The other is Union Square, which is the former Central Mall, Central Square, that whole development there. It is coming along nicely, both of them. As I mentioned earlier, Union Square Residences, the sales have also caught up really well. We are really excited. The office market continues to remain strong. When these two office assets are ready, for Newport Tower, it will be in the second half of next year. That is the office component of Newport Plaza. That will be second half of next year. That will add about 220,000- odd sq ft of NLA to our portfolio. Union Square will be sometime in 2029, and that will be 250,000 sq ft. Obviously pre-leasing efforts are strongly underway and very encouraged so far by the feedback. Our hotel portfolio has also bounced back really well.
We have taken the opportunity to continue to revamp some of our assets. You can see that the Millennium Hotel London Knightsbridge, renovations are underway. Copthorne King's Hotel as well. Then we continue to build out the M Social Hotel Sunnyvale. That has a targeted completion towards the end of this year. We have also finished the renovation for this Millennium Premier New York Times Square, which is part of the Broadway Hotel. It is a smaller component of it, a more premier, upscale component of it. That has just been completed in June. We are excited to see that. So far, some people I know have stayed there already, and they are really pleased with it. Great that we are refreshing our portfolio as we move along. Just a bit about our industry and sustainability recognitions. Last slide before I hand over to Yiong Yim Ming.
Obviously, the thing on everyone's mind is: When is your strategic review coming out? I know we have taken quite a while on it. We wanted to really spend enough time to make sure that we do a thorough review and ensure that we have a proper roadmap, how we are going to implement the whole refresh strategy, and how we are going to get there, and ensure that every number that we share with you towards the end of September is properly backed up by how we are going to get there, what is the asset makeup within it. Very excited to share that with you. It is more or less complete. The strategic review got final approval by the board yesterday. We just need to tweak a few more things and, of course, create some nice, pretty infographics to go with it.
We thought we would just give ourselves a little bit more time. Yeah, suffice to say, we are really excited and eager to share this with you at the end of September. All good to go here. Next up, I will pass it to Yiong Yim Ming for the financial highlights. Thank you.
He is really tall. Thank you, Sherman. Morning, ladies and gentlemen. I will start off with segmental analysis. There is revenue growth across all segments, increase of 61% in first half of 2026. EBITDA stands strong at SGD 694 million, increase of 25.9%, and very pleased to report that PBT and PATMI has both roughly tripled, rising to SGD 404 million and SGD 302 million respectively. Let us delve a little bit deeper into each metric.
For revenue, the group posted revenue of SGD 2.7 billion for first half of 2026, up from SGD 1.7 billion in first half of 2025. The property development segment remains the largest contributor, with revenue surging 157%. As Sherman has mentioned the various contributors, and we all know that revenue from Singapore's development projects are recognized based on the percentage of completion method. The strong construction progress across these projects supported the accelerated recognition of revenue during this period.
Kudos to our project team for their excellent execution and for maintaining strong momentum across our projects. For hotels, the hotel segment delivered a 6.4% increase in revenue, supported by a 4.9% growth in RevPAR. RevPAR growth was recorded across all regions, with Singapore up 4%, U.S. up 10%, and Australasia up a strong 14%. The strong performance in Australasia was driven by New Zealand hotels, which recorded improvements in both occupancy and room rates. This was partially offset by rest of Asia, where RevPAR were impacted by softer performance in KL, Jakarta, and Manila. Hotel revenue was also boosted by the acquisition of Holiday Inn London-Kensington High Street, which we always call HIK because the name is pretty long. We acquired the hotel in December 2025.
Hotel has performed strongly since acquisition, achieving an impressive 96% occupancy and is now the largest contributor in the U.K. portfolio. Overall for hotel, the segment performance reflect broad-based RevPAR growth across our key segments, together with strong contribution from our newly acquired hotel. Moving on to investment properties. They also delivered a 3.2% increase in revenue, notwithstanding divestments of the Bespoke Hotel Osaka Shinsaibashi and 1250 Lakeside in Sunnyvale last year. The growth was driven by higher contributions from our U.K. commercial properties, Jungceylon, our mall in Phuket, as well as the living sector in Singapore and the U.K. These stronger contributions more than offset the revenue from the divested assets, once again demonstrating the resilience and continued growth of our investment portfolio. Now we move on to EBITDA. EBITDA stood at SGD 694 million, a strong growth of 26% year-on-year.
I mentioned this before, EBITDA is an important measure of the group. We look at it for cash generation capability as well as a key metric that we monitor closely. Our target is always an annual EBITDA of SGD 1 billion, which supports healthy cash generation. Excluding capital recycling gains, all three core segments recorded higher EBITDA. The strong EBITDA was again underpinned by our property development segment, supported by income visibility from our successfully launched projects. You can see property development EBITDA, they doubled year-on-year. Other than the projects that we mentioned in revenue earlier, JV projects also contributed to this EBITDA. This included The Orie, CanningHill Piers, and Kassia. For hotel operations, EBITDA increased by a strong 27% year-on-year. They are supported by higher revenues as well as disciplined cost management.
GOP margin remained resilient at 30%, broadly in line with first half of 2025. In key markets of Singapore and London, GOP margins remain particularly strong at 35% and 42% respectively. As mentioned earlier, New Zealand had good revenue improvement and this flowed along to GOP margins. Australasia GOP margins also extended from 33% to 35%. The combination of revenue growth, resilient margins, and disciplined cost management drove this hotel operations EBITDA. For IP, which is investment properties, EBITDA was slightly lower in first half 2026 due to lower capital recycling gains. Just a refresher, for first half of 2026, we have recycled Quayside Isle and several strata units in Fortune Centre versus the year 2025 where we had a huge recycling gain of City Industrial Building. Importantly, excluding capital recycling gains, the EBITDA contribution was still broadly comparable year-on-year.
This once again reflects the underlying performance of our commercial properties as well as our living sector. I will move on to PBT. It improved 189%. One interesting fact point is that property development takes up 67% of revenue, but 84% of PBT. The PBT explanations are largely similar to EBITDA, but it is impacted, as we know, by financing and depreciation. Net finance costs decreased significantly by 47% to SGD 145 million. This is supported by an 11% reduction in net interest expense as well as a favorable swing in exchange. The group recorded exchange gain of SGD 38 million in first half 2026 versus an exchange loss of SGD 63 million in first half of 2025. I want to highlight that these exchange differences are unrealized translation differences from intercompany loans. They do not represent underlying operating cash flows.
For property development, while the segment delivered a stellar performance, I also want to reiterate that the profits from this segment are inherently lumpy. As we all know, it is dependent whether there is key project milestones, whether there is an EC, there is a handover for overseas, as well as the progress of project completions. Hotel operations, a significant turnaround. It reversed from a loss of SGD 84 million in first half of 2025 to a profit of SGD 42 million in first half of 2026.
This improvement was largely driven by two things. One is the newly acquired HIK, and two is a favorable exchange position from exchange loss in 2025 to a gain in 2026. This is largely from intercompany loans. For investment properties, PBT decreased also due to lower capital recycling gains. I sound like a broken record, but it is worth reiterating that CDL accounts for investment properties at cost.
What you see in these financial statements has no fair value gains. Instead, they record a depreciation of about SGD 68 million. Just moving on to capital management. We continue to maintain very strong and robust financial fundamentals with a well-balanced debt maturity profile. Gearing stood at 75%. It is an increase of 4% over 31st December 2025, largely attributable to the acquisition of the two GLS that we have acquired this year, as well as SGD 144 million of CapEx on our investment properties, largely for Newport and Union Square. Looking ahead, we expect healthy cash flows from four projects that will achieve TOP this year. Lumina Grand achieved TOP in April, Norwood in August, and we are expecting the The Myst as well as CanningHill Piers to TOP in 2026, and these project completions will support the cash generations.
Liquidity position is continuing to be very strong, SGD 2 billion of cash, SGD 4.9 billion of committed and undrawn credit facilities. We have definitely sufficient financial headroom. For all the other metrics, I think average interest has dropped, and then it is now at 3.4%. I know one of the favorite questions is, where do we see where we end the year at? We have articulated previously, we hope to end the year no higher than 3.5%. As shown, the last one is just basically on hedging. We do not do any speculative. You can see our loans match with the assets that we have, and we have an overall natural hedge of about 76% across the key markets.
Financial position in a nutshell, we reiterate we have a strong liquidity position, diversified financing sources, and we definitely exercise prudent financial risk management. With this, I hand over back to Belinda.
Thank you, Yim Ming and Sherman. We would now like to move to the second part of today's briefing, which is the Q&A. Please feel free to ask your questions. My colleagues are standing around the room with microphones, and if you have any questions, please raise your hands and they will come to you. The only thing we request is if you could let us know who you are, introduce yourself and the organization that you represent. For those who are joining us on webcast, you will similarly be able to pose your questions if you just tap on the Q&A feature on the call. May I have a Oh, I see hands pointing here. Maybe let me just take the first question. Tabitha, maybe you kick off first.
Hi, good morning. Tabitha from DBS here. Congrats on the strong results. My first question is on divestments. Your progress appears to have been slower than expected this year. Can we expect a more accelerated pace of capital recycling over the next 6- 12 months? Which assets are in the pipeline? Any of the U.K. legacy assets that you identified previously?
Morning, Tabitha. Yes, as I mentioned earlier, we see it as divestments will be weighted more in the second half this year. Having said that, I mean, some of them, especially some are fairly significant divestments. We are in very advanced stages, but they may not close by this year, so some may trickle into next year. Yes, as Yim Ming mentioned earlier, we did record Quayside Isle as a divestment in our accounting. I do not count that as this year because I already announced it as part of our divestment amount for last year when I presented to all of you our full year results, because I announced it in December, but it only completed in January. Therefore to me, this year, we have not done any divestments, other than some few strata title units at Fortune Centre. Yeah.
That really emphasizes the urgency for us to kick it up for the back half this year. Plus, with regards to going forward, because I think you mentioned, is it 12- 18 months or something? Anyway, all that, we will share more when we release our strategic review outcome end of next month. That will cover our whole capital recycling efforts for the next few years. We do not generally have a practice of, I think, disclosing what the assets are. Surprised to say, you are right on the dot. The legacy U.K. land bank that we had showed earlier, I think the last time when we announced results, we said we had this SGD 800 million of U.K. legacy assets. Those are certainly on the cards, too.
Thanks. My second question is on Singapore residential. You have been very active in land banking, but with the recent GLS bids and such elevated pricing, will you still continue to look at GLS or en bloc as something that you will consider given the latest measures? Also on EC projects, you have been working very well for the group, and you have two upcoming projects not subject to the new rules. How is your stance on participating in the EC market change?
Yeah. Look, prices have always been high for GLS sites, right? Any good site that is well located, has strong connectivity, will always be hotly contested. So we will continue to participate, we will just have to do so in a disciplined manner. Let us see where we get to. As I mentioned in previous analyst briefings, I think we also need to watch what our pipeline looks like. We do not want to go back to a point in time, like in early 2018 when I had 4,000 units in the pipeline, and then suddenly, some cooling measure comes out, and then our share price was really wrecked. So I think we have an optimal pipeline land bank number in mind.
I think we'll always try to ensure that we replenish on a timely basis, because as all of you know, I can reduce our gearing and also conserve more cash by not investing, but it hurts you down the road when you don't have revenue and profits coming in. We'll continue replenishing, we continue to look at good land sites. We are privileged to have won two this year. We participated in quite a few. Obviously, one recent one was Bayshore, where this large consortium that we were leading, we came in second, so that was a bit of a pity. But we'll continue to look at future GLS. Likewise, we will look at en blocs as well.
I previously mentioned to the audience that en blocs are usually not our preferred method because it's a much more longer, cumbersome process to get through the en bloc. There may be more studies that you may need to do, whether it's traffic impact assessments and stuff like that. But it's still something we'll keep in mind. There are a lot of very nice, well-located legacy or aged assets. If the opportunity comes up and the pricing is within a range that we deem acceptable, we would certainly be keen to go for it, too. As for EC sites, yes, the new EC sites will certainly come under a different set of rules, and that will moderate things. Having said that will be evident in the bid prices for the land.
We will also continue to participate, but we will have to obviously moderate what we bid for it.
Okay. Thank you. Can I move to the next question, please? Okay. Maybe let me take Xuan.
Hi. Morning. This is Xuan here from Goldman Sachs. First question is on the Newport office in Union Square. Can you share what is the CapEx and yield on cost? Beyond this project, are you actually prepared to undertake more redevelopment, or will you only embark on those when these two are completed? Thank you.
Okay. Yeah, Xuan. I will let Yim Ming talk more on the cost. But yes, we are willing to undertake more redevelopments as and when. I think it is appropriate and obviously accretive for us. As mentioned at the full year briefing to all of you, we have a few other assets that could potentially go under different schemes. Newport is under the CBD Incentive Scheme, where we had a 25% uplift. Union Square is under the Strategic Development Incentive Scheme, so that was a 67% GFA uplift. We have, for instance, two other potential projects that fit under each scheme. There is the City House, which can still go under the CBD Incentive Scheme. Then there is also, you remember we en bloc-ed The Adelphi. We own a large part of it, but we bought out the remaining minority shareholders.
Now with full control of The Adelphi, and obviously CDL Hospitality Trusts has Orchard Hotel and Claymore Connect, the mall next door. So that is a potential project that could go under the Strategic Development Incentive Scheme as well. Yes, but, as mentioned at the full year briefing, I do not want too many redevelopments going on at the same time because every time you do it, you lose the entire rental income and several years of heavy CapEx as you build out these big integrated mixed-use developments. Yim Ming?
Never really divulged it, but okay. The PDC for Newport, as well as Union Square, I am talking about the commercial elements. They are in the range of about SGD 1.1 billion and SGD 0.9 billion, thereabout. So this is based on market prices of the land. As we all know, Newport was our previous Fuji Xerox Towers, so this SGD 1.1 billion actually reflected the market value of the land at the point of transfer. So clearly the embedded value is what we have not yet unleashed, which we will, should we do any other capital movements, yeah. So out of which, I think, I have mentioned earlier on this time around, and in fact for the last one, two years, we have spent significant CapEx on these two properties.
So right now, I think the remaining commitments for these two properties is also fairly minimal. It's probably in the range of [audio distortion] . I can't say. Let you guess.
Okay. Can we move on to the next questions, please? Any hands? Everybody's very happy with the results. We can go for lunch now. Okay. Maybe I move to Dexter. Is it Dexter? Yeah.
Hey, [Sherman]. Can I ask quickly on the. The property developments have done very well. You have mentioned obviously about land costs, but what's your sense of the Singapore property market now? Do you think this is the best that we have, or do you think there's still, from what you're planning, is there a long way still to run in terms of prices, in terms of the health of the market right now, or you're a little bit more conservative on it? That's my first, but I'll ask next one.
Morning, Dexter. Yeah, I think the market has entered into a more stabilized phase. As mentioned earlier, year-to-date price increase for private residential according the URA index is 1.4%. I think we'll probably end the full year maybe somewhere between 2%-3% price growth. I think that's very normal, right? You keep track with inflation costs and obviously our development costs have risen as well over the years. So, I think, and the units transacted, whether we hit 8,000 or 10,000 end of this year, I think it's a very There are indications of a very stable market. So far I'm quite pleased with it, and this is in line, I think, with where the government would like to see the residential market be as well. Yeah, we continue to be optimistic about it. This is our bread and butter. CDL, we do property development very well.
Singapore is our strongest market because it's our home ground. So we will continue, I think, to execute in this market and continue to be on lookout for the right opportunities, and the right GLS land tenders to participate in.
And just two more follow-ups. One is on your gearing. You have resumed it a priority, but it has gone up again, albeit for the GLS. Is there actually a concrete plan to reducing? Is there a target? What the plan is? In terms of your strategic review, obviously you all wanted to do it in June, announce it in June. What is the reason for the delay? Is it safe to assume that the whole board has unanimously approved it? Thank you.
Yes. I will address the gearing one first. Gearing has ticked up, unfortunately, because obviously we have bought these two GLS sites, which we are very excited about. We think they are good purchases, but it does add to our gearing. It is not at the level that we are comfortable with. 75% is high, but the good thing is that you will hear, and again, sorry today that we will be short on details, but you will hear at our strategic review, unveiling of our strategic review outcomes end of next month, how we have a concrete plan to bring it down. A very concrete plan backed by assets and numbers, to bring it down to a level that I would think everybody should be very happy with. But we will talk more about that end of next month.
Your other question, strategic review, yes, board has approved it unanimously yesterday. Really grateful to the board for standing behind what has been many, many months of work, right? Actually close to a year since we started this. But we still need to tweak certain final parts. Because as management, right, we have to ensure that everything we put out there, we can absolutely deliver. So there is still some final tweaking we need to do. I was joking earlier about the pretty infographics and all that, but there is a little bit more work to be done to get the whole plan concrete and in shape. So that is why we needed a bit more time as well.
Also, obviously, we are also very busy running the business, so we thought, let us put it at the end of September, so that will give us time without having to rush and put out something that may be slightly unfinished.
Okay. Maybe since it is there, why do not I just take Jovi, then I come to you, Kiang, then I come back to Rachel, okay? Jovi, maybe let me take yours first.
Thanks. Hi, I am Jovi from The Edge Singapore. Thanks for the presentation. Just two, new Grade A office supply is tight in the coming years. Can I just confirm how leasing is progressing for the office space at Newport Plaza and Union Square? Are you able to share any figures? I think building on Dexter's question, do you see any new launch prices hitting SGD 4,000 per square foot? Also Boulevard 88 just opened this morning, for example. Thanks.
Mr. Chia, why do not you take both questions? Having said that, I know. I may look like a bad guy for throwing the tough questions at him. Okay, I will take the first one, Jovi. We do not tend to share too much about our pre-leasing efforts. Obviously, pre-leasing really ramps up strongly the closer you get to completion. But having said that, we did share when we unveiled our full-year results of 2025 that, obviously, we are at a 52% pre-lease for Union Square, because that was one single large tenant. But suffice to say, both of them are actually It has been very encouraging. Tenants have been interested, a mixture of large tenants and smaller tenants. But yes, sorry, Jovi, we do not typically share pre-leasing commitments until we get closer to when the building is about to TOP.
As for whether resi will hit SGD 4,000, I will let Mr. Chia answer that.
Actually, the SGD 4,000 benchmark is not high, actually. Some of the Orchard Boulevard property already SGD 5,000+ . I think, depending on location and the type of property, the quality, I would expect the new launches to be on the high tier on those very good locations, like the Orchard Boulevard you mentioned. Thanks.
You may remember, Jovi, that the record was set by The Marq on Paterson Hill, that was SGD 6,800+ per square foot. Obviously, there are other developments that have hit SGD 5,000+ . But whether you are asking whether SGD 4,000 become the norm, that is not going to be the case. But there will be some luxury high-end projects that will hit all across SGD 4,000.
Okay, thank you. I am going to just move back to the front. Yew Kiang first, and then after that I will pass to Rachel.
Hi, Yew Kiang from CLSA. I am glad to see the higher interim dividend, despite the absence of any significant divestment gains. I think Sherman alluded that Newport Tower will be coming in second half. But if the divestment does not come through, is there a risk that your full-year dividend for this year is going to be lower than the previous year?
Yew Kiang, as mentioned, our dividend policy is now based on a dividend payout ratio, minimum of 35% of PATMI. It is whatever PATMI is. Yes, there is a risk. If we do not hit the same kind of 600 over million like last year, there is a risk the absolute amount will come down, but not the ratio. Last year, we paid out 40%. This year we could pay out minimum 35%, maybe more. The ratio has a floor, but the amount could come down if we do not hit the same thing.
Okay. Thank you.
We will just pay out whatever our PATMI is, with or without capital recycling gains in there.
Thank you.
Okay, Rachel.
Hi, good morning. Good to see the share price pop. Actually, just following up on Yew Kiang's question. Is second half, do you have any more residential properties that you can recognize to support your second half numbers?
We do, but it's definitely not as strong as first half. First half we had Lumina Grand, which is an EC TOP. I can tell you in first half, The Myst as well as Newport Residences, are a very high percentage of completion, in excess of 90%. What we have is going to be our rock-solid Newport Residences, which is more than 80% sold. It's apparently in June is about 50% completed. We'll see the progress of completion by year-end. But relatively to first half, yes, it will be smaller.
Thank you. My next question is really on hotels. I think some of your peers are thinking of paring down their stake. I know it's a bit different for your City Developments hotel portfolio, but what are your thoughts about hotel?
We are planning to share more at the strategic review outcome unveiling end of next month. Maybe I will turn it over to Eik Sheng, if you wish to talk about our thoughts about our hotel portfolio.
For the first half, I think, of course, it is still quite volatile. Because we have such a diversified portfolio, net, what we did see is that we still performed better than 2025. Even though there were some hotels in regions which were impacted, we saw other regions take up the slack as well. I think that is the benefit of having a very diversified portfolio. That kind of principle, I think we will continue to maintain. I think we will have more to share at the strategy review. I think we cannot really share too much details at this point.
Just trying to tease it out. Thank you.
Okay, wait, let me just—
Thank you, Rachel. Well, good to see you again. It has been a while.
Let me just take some questions on the webcast, which is similar to in line with what Rachel just mentioned. The question here is from KO Teen of Falcon. Most of your competitors are shifting to an asset-light with higher certainty of profitability and cash flows. Under this strategic review, what uniquely distinguishes CDL to stride in the Singapore market? That is the first part. The second part is capital recycling when others are disposing, what kind of matrix or what kind of thoughts you have when you want to maybe capital recycle? What are the priorities that you will put beyond value and time?
Yeah. For understandable reasons, I will skip the second question, because I think we will address that more when we have more concrete details to share. In terms of the first question, and I think I have mentioned this to many of you before. We will never be a fully asset-light company. That is not in our DNA. I think, asset ownership is a big part of CDL's DNA, including doing heavy property development. As I have mentioned before, and now we are up to SGD 36 billion of assets, right? We do need a portion of our balance sheet to be a bit more asset-light, so we do not get too top-heavy. Yes, the way to do it is to have a disciplined and systematic capital recycling program that goes on year in, year out.
As we are buying new stuff, we should be also divesting some of our either non-core or matured or underperforming assets as we go along. This cycle should continue alongside with our continued investments for growth.
On that topic of capital recycling, I also have another question from Vijay of RHB, which is joining us on webcast. In some way it is related, so I guess you can use it as a response. The first part is, can we have an update on fund management segment? The FUM growth has been slow and short of the SGD 5 billion target, and what are your plans for the FUM growth? That is the first one. The second one is a little bit more operational. Can we have an update on the living sector portfolio? The PBSA in U.K. segment seems to have softened. So what is your view on the portfolio performance for the living sector?
Yeah. Again, I am sorry to be such a cop-out, but we will address more details when we have the session on the strategic review. Fund management is going to play a much bigger leg, a much bigger role for us going forward. Currently, roughly speaking, our AUM in the fund management side is about SGD 4 billion right now. Primarily comprised of the two REITs that are CDLHT, as well as CDL Hospitality Trusts, as well as IREIT, where we are co-manager. So primarily comprised of these two REITs as well as a few small private gigs. Having said that, we do have plans to substantially grow this. And, obviously we are going to have to put a much stronger setup in place to ensure we can get there. But yes, we will unveil more details on that next month. What was the other part?
Living sector portfolio in particular, PBSA U.K.
Yeah. Of all of our living sector, which currently is mainly in the U.K., where we do the multifamily, which is a PRS as we call it. So the U.K. PRS, Japan PRS, and U.K. PBSA. Japan PRS has been the strongest. Our [audio distortion] doing exceptionally well. We are seeing strong rental growth. Occupancies are almost full. U.K. PRS has been improving. It was off to a slow start. We were a bit disappointed, but it has been improving. Unfortunately, U.K. PBSA has been a bit of a drag for us. I would say currently our yield on cost for the six PBSA we own is about 4%. It is not great. We wish it was higher. U.K., the entire PBSA market has been under some pressure and some structural challenges.
I think I have mentioned earlier to all of you before as well, with all this conflict going on, or trade tensions between China and the U.S., we thought more students from China will go to U.K., but that did not really happen also. The U.K. PBSA sector is very dependent on foreign students, especially to drive performance. Yes, that has been disappointing, but we will continue to monitor. Our exposure is not huge. Yes, six assets, it is not small, but it is not like large portfolio of 20, 30 properties either. So it is manageable for now. Again, we are reassessing all this with a view to taking a decision on whether to expand or shrink or completely divest the portfolio.
Okay, good. I am going to move forward. Okay. Let us go with Wilson first. Wilson, then Brandon.
Hi. Morning. Wilson from Jefferies. Just a question on Singapore land banking. I think Sherman, you mentioned how you are looking to replenish but not really overdo it. Is there like a comfortable level of Singapore land bank you are hoping to sustain? I guess related to that also, what would be the implied kind of steady state churn rate or number of launches you would be seeing out of the land bank per year? Just lastly, on a similar vein, within your Singapore land bank, are there any preferences for specific regions over others?
Wilson, very sorry to give you a cop-out answer again, and this is not related to strategic review. Very good questions, but we do not typically want to share too much here because, again, it is information that could be used against us. Once people know what is our optimal land banking amount, what regions we prefer, what is our churn rate or target churn rate every year, I do not think this is good for us to share this publicly, so apologies for that.
Okay. Maybe we will move down to Brandon.
Yeah. Hi, morning. I would not ask anything to do with the [audio distortion]. Just on the results for the first half, we saw that the hotel numbers were quite strong. I think earlier it was mentioned that there were some cost savings. Could you let us know what these cost savings are? Also, if we were to take away the Forex gain from Singapore dollar, what would be the core EBITDA and PBT growth of the hotel side? Because when I look at the GOP margin, it seems kind of flat year-on-year, right? Yep.
Your question always must be a very difficult one, right? The exchange that the hotel segment has. Okay, it is a little bit convoluted because it spans over different segments. While we always associate M&C Hotels, they are not only in hotel, they do have investment properties as well as others. But looking at where we are for hotel operations, the PBT reversed from SGD 84 million to SGD 42 million.
The SGD 42 million included exchange in the range of around SGD 30 million. The underlying performance is still positive. Having said that, I also want to reiterate that for the first half of the year, usually that is not the strongest part for hotel. We all know that the winter months, the Europe hotels, as well as the U.S. hotels do not do as well. So it is not exactly linear. The second half would look a lot better.
Okay. My second question is with regards to the investment sentiments for U.K. and Japan. Obviously the interest rate environment has not been that favorable. Could you maybe just share some color on what buyers are thinking right now?
Sorry, Brandon, buyers relating to?
Relating to your potential sale of the U.K. development sites and Japan. You do not have to tell me whether you can sell. It is more like just trying to understand how the market is doing.
If you really look at it, clearly we all know that our clear divestment, we have highlighted the U.K. legacy. We are heavy in U.K. Our total assets in U.K. is about 13%. Of which, of course, I think we have obviously three chunks, right? I mean, four chunks. Hotels, which are doing very well. Living sector, which is very resilient. U.K. commercial, clearly, I think that was something that we tried to put in a REIT, and that has been stalled for a while. Of course, the last one being the development portfolio. The development portfolio is the part that we are looking obviously to actively. It is legacy, we have indicated, no strings attached, we are trying to do that. The buyers are largely, we all know, it is going to be a large pool of is likely to be Middle Eastern.
Clearly within the current climate, of course, I think there is a few risks, right? I mean, firstly, in Middle Eastern, we all know that the money is. Of them being able to take money out is not exactly the easiest. That is number one. I think forever, there is this interest rate, they are saying that obviously if the interest rate hike invisible, you could possibly squeeze better earnings. I think distressed sales is quite evident today, but we are not in a state of a distressed sale. We still believe that we have very good assets, especially Pavilion. But yes, the natural buyer pool is naturally more of the Middle Eastern.
Yeah, just to add to that. Yes, we will not take whatever price is on the table just so we can meet our divestment targets. I think we do not want to leave too much money on the table. From time to time, we do get offers for assets within this legacy land bank, but if it does not hit our required targets, we will not sell it.
While I am urgent to want to, under some urgency, to want to divest it, but again, I cannot do that to CDL, right? By leaving too much money on the table. Some of them have good potential, just that it will take too long for us to go and try to unlock or recognize the potential. Regarding Yiong Yim Ming, what she mentioned, she is not wrong, I would say. Actually, many of these development sites, a natural buyer also would be U.K. developers.
We have been in talks as well. But again, she is not wrong in saying that it is Middle Eastern money because if you look at the site we sold last year, Ransome's Wharf, that was to London Square, a U.K. developer, which is owned by Aldar anyway, Aldar, sorry, owned by Aldar, which is an Abu Dhabi developer. So, yes, maybe much of the money comes from the Middle East, but that is not the only pool. We have been in talks with U.K. developers, too, so I think that is also a very natural buyer for some of the sites. Especially if they already have their strong development team and network within the U.K.
Okay. I am mindful of time, so I am just going to take one of the last two questions. I am just going to pass to Mervin first.
Hi, Mervin from JPMorgan. Maybe we can move to slide 21. Praise in advance, but we have a lot of U.K. debt. I noted that you issued the MTN program where you issue PERPS. Rather than waiting for any U.K. land bank disposal, should we not issue some cheaper PERPS to pay off this more expensive U.K. debt, or take on more, think of that considering your yield on cost on PRS is 4%, which probably does not PBSA, sorry, that does not cover perhaps the U.K. borrowing costs. Yeah. What are we doing in terms of the capital management? Yeah.
You are right. By that, we do a little bit of cross currency swaps where we borrow in Singapore dollar and then we do a cross currency swap to U.K. to service our debt, we service our U.K. debt. If you look at U.K. debt composition, the fixed ratio is possibly lower. We missed a window back in 2018, 2019. There was never a perfect window to do that except at an expensive price. Having said that, we have been doing what you suggested, but to open that a little bit more, that still leaves you with a currency risk. That is not exactly what we were trying to usually posture. While euro has been a lot more stable relative to U.S. dollar comparing the last two years, it still lends some exchange exposure, which we possibly might not really want to do that.
Typically, every time, when it comes close to the refinancing, we do look at every debt closely. We will look at all the instruments, whether it is cheaper to refinance using the natural loan, natural currency, whether it is cheaper for us to do a cross currency swap or basically just leave the exchange open and borrow in Singapore dollar. Very simply, I think everybody would think that, "Hey, I can borrow in sub 3%, issue bonds sub 3%, issue Singapore PERPS sub 4%, and U.K. that is possibly at most five. Why don't you just do that with arbitrage?" But very frankly, the exchange movements, we have done that in the past. It is very easy to tip over with a 1%, 2% savings. The savings in real is possibly in the range of a 1%- 1.2%. It is still a risk movement, if you ask me.
Well, I am asking because CDLHT—
Yes.
—has achieved 3% increase from issuing PERPS to reduce borrowing costs.
Yeah.
But anyway, we can discuss this offline.
Yeah. PERPS pricing is typically about 1% higher than traditional debt. We have done bonds, very frankly, at mid 2%. So it is still a little bit pricey for us. Yes, it does make the metrics look better. It does make your U.K. numbers look a bit better, if I were to attribute a lower financing cost. But very frankly, if we want to do that, I would just keep issuing a lot of Singapore dollar bonds, and I basically have a more open exposure of currency risk. Since we are very, very clear that U.K. legacy is what we want to divest, I think we can still give it some time for another one, two years. Yeah.
And final question from me. I presume the hotel is still considered core part of the business, but maybe, I know you sure want to talk about where is the greatest opportunity within the hotel business? Yeah, thanks.
I think we are not giving anything away, but we have always done pretty well in the Gateway City hotels, where I think we see both strong demand and, of course, the capital appreciation, in terms of the value of the assets that we have. So I think that is probably the winning formula that we have had, all through the years, and especially when we do divest them, right? We have seen in the past with Millennium Hilton Seoul, recently with the Bespoke Hotel Osaka as well. So I think that is likely. I do not think we will change that formula for now, but I think that is only so much we can share at this point. Yeah.
Yeah. Just to add on to that a bit, yes, hospitality will still remain a key part of our business. Our portfolio may get streamlined, but it continues to be a key leg of our business and does contribute strongly when it is managed well.
Okay, I am mindful that we are just heading into lunchtime. Is there any more burning questions? If there are. There is burning questions. One more? Okay. It has to be burning, Xuan. I will give you that last question then.
Xuan here from Goldman Sachs. Just a quick question on the share performance plan. Can you share what is the key indicator that is tied to it? Is there any maximum of what can be issued each year?
I think there is not a maximum limit that I recall. But in the past, when we had that at the AGM, we also flagged that the dilution is very, very minimal, right? At the end of the day, we are issuing out of the treasury shares that we have bought back. As to the KPIs, we have not released what they are exactly, to the public. But I think it is safe to say that they are tied to the long-term goals of the company, and going forward, they should be tied to the KPIs of the strategic review as well.
Anyway, to close off, I think for the shares, don't worry, we're not paid that much. The dilution impact is so immaterial that it is definitely not calculated.
Okay. All right. If that is the case, I just want to ask if the panel has any closing remarks.
I look at the big picture. It is not quite often that we look at everything in single isolation. What we want is to be the best of its kind, and I will not hesitate to do that. Of course, some of the strategies that I'm going to have, I cannot tell you now because it is impossible to share some of the foresight. I wish you well. Thank you very much.
Thank you, Chairman. I think that's the thing, right? Stay tuned. Stay with us. At the end of September, we'll also be sharing more. Ladies and gentlemen, we have really come to the end of the briefing. On behalf of the CDL management and my fellow colleagues in the room, thank you so much for attending. Thank you to all the webcast audience as well for your support. For those at the hotel, there are refreshments outside. I hope it suits your lunchtime. Please continue to stay with us and catch up with us over coffee outside. Thank you so much.